Members of the United Auto Workers union have voted down a proposal from Deere & Company to extend the current labor agreement by two years, setting the stage for contentious negotiations over a new contract next year.

The agricultural equipment maker had offered workers a 4% annual wage increase over two years, plus a $3,000 bonus, if they accepted the terms by the end of August. Under the proposal, the existing contract—originally set to expire in 2027—would have been pushed out to 2029. The company stated that pensions, healthcare coverage, cost-of-living adjustments, and other benefits from the 2021 agreement would have remained unchanged under the extension.

UAW President Shawn Fain criticized the unprecedented extension offer as an attempt to bypass normal collective bargaining procedures. He noted that the proposal failed to address concerns about outsourcing work at Deere's unionized plants or bring back 1,600 laid-off employees. "The company's proposal did not respond to the core issues on the minds of our members, especially job security," Fain said on Sunday. "We'll settle the score with Deere at the 2027 bargaining table."

Deere officials have not yet commented on the vote outcome. The Illinois-based company faced a strike by UAW workers in 2021 that lasted more than a month. Workers twice rejected contract drafts before approving a six-year agreement that included an immediate 10% pay raise and an $8,500 signing bonus per worker.

In July, the union submitted a counterproposal to Deere's extension offer, which the company rejected, claiming it would cost roughly $500 million more than its own plan. "With current equipment demand declining, this counterproposal runs counter to Deere's goal of providing job continuity and certainty for employees," the company said in a statement.

Deere dominates the North American market for large agricultural machinery, a segment that has seen demand plummet since 2023. Lower crop prices, combined with high fuel and fertilizer costs, have squeezed farmer incomes, prompting them to delay purchases of tractors and harvesters. Despite the agricultural downturn, Deere remains profitable. The company has controlled costs through significant layoffs while profit growth in its construction equipment and other business segments has continued. Over the past year, its stock has gained 29%, outperforming the S&P 500 index.

Fain argued that Deere has prioritized shareholder returns and executive compensation over worker interests in recent years. "The company should first recall the 1,600 laid-off employees and commit to no further layoffs over the next two years," he said.